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| February 3, 2009 |
| Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy. |
Today's sponsor is ASC & The ASC Institute
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[Guidance Overview]
ERISA 403(b) Plans Now Subject to Standard Form 5500 Requirements (PDF)
2 pages. Excerpt: "ERISA Section 403(b) plans with plan years beginning on or after January 1, 2009 are now generally subject to standard Form 5500 filing requirements. This change occurred when, on November 16, 2007, the Department of Labor (DOL), Internal Revenue Service (IRS), and Pension Benefit Guaranty Corporation (PBGC) published final annual reporting regulations that placed such plans on par with other ERISA-covered pension plans. Sponsors of plans with 100 or more eligible participants will now need to have their plans audited by an independent qualified public accountant. Non-ERISA 403(b) plans need not file a Form 5500 Annual Report. [This article] summarizes the Form 5500 filing requirements for both large and small plan filers." (Porter Wright Morris & Arthur LLP)
[Guidance Overview]
Clarification on SARs for Defined Benefit Plans
Excerpt: "For the past year or so I have been writing articles -- and making comments - that, beginning with 2008 plan years, defined benefit plans no longer distribute Summary Annual Reports (SARs) but rather an Annual Funding Notice. That's not quite correct. Under the Pension Protection Act of 2006, a new rule requires PBGC-covered defined benefit plans to provide an Annual Funding Notice rather than a Summary Annual Report for plan years beginning in 2008 and later. . . . The traditional SAR format should be used for defined benefit plans that are not subject to PBGC insurance, which generally includes those plans that cover professional services companies (think lawyers and doctors, for example) with no more than 25 employees. Of course, owner-only defined benefit plans are not subject to the SAR or Annual Funding Notice rules." (form5500help.com)
[Guidance Overview]
Another Question is Answered in the 401(k) Plans Q&A Column
Our defined contribution plan is top-heavy for the year 2009. The percentage was 61.38%. Would any of these options help? (1) Have one of our highly compensated employees ("HCEs") roll over her money into an IRA? (2) Have a non-highly compensated employee ("NHCE") roll over her money out of our plan? (3) Have an NHCE roll over her money into our plan? If the NHCE rolled her money into the plan, the top-heavy ratio would be less than 60%. (BenefitsLink.com)
[Guidance Overview]
Bunch v. W.R. Grace: What a Breach of Fiduciary Duty Doesn't Look Like
Excerpt: "I cannot do better by anybody interested in fiduciary obligations under ERISA than to recommend to you the First Circuit's decision the other day in Bunch v. W.R. Grace & Co.. For those of you not familiar with the lower court proceedings in that case, what was at issue is whether it was a breach of fiduciary duty to sell company stock, rather than maintain it as an investment option, after retaining outside advisors to investigate the stock's value, potential and appropriateness as an investment option." (Stephen Rosenberg of The McCormack Firm, LLC)
GM and Chrysler Offer New Retirement, Buyout Packages
Excerpt: "General Motors Corp. and Chrysler LLC are offering blue-collar employees another round of buyout and early retirement offers as the automakers try to cut their work forces and reduce expenses, union officials said." (AP via The New York Times; free registration required)
Pension Investing: What's the Right Level of Risk?
Excerpt: "Most plan sponsors should put more emphasis on liability hedging, one adviser claims. Another point of view: Take no risks, period." (CFO.com)
44% of DC Plans Expect to Replace Investment Offerings in '09
Excerpt: "A Callan survey released today showed 44% of private and public defined contribution plans expect to replace an investment option for performance-related reasons in 2009, up from 39% that did so last year. Plan officials also said fund and manager performance and due diligence are their primary focuses for 2009, according to Callan's '2009 Defined Contribution Trends Survey: Impact of Recent Market Volatility on DC Plans.'" (Pensions & Investments)
Map Showing Funding Levels of State Pension Plans
Excerpt: "State pension plans are woefully underfunded. Taxpayers may get the tab." (Forbes.com)
73% of DC Sponsors Say No 2009 Match Changes
Excerpt: "While media accounts may be full of reports of employer decisions to suspend their retirement plan company match contributions, 73% of DC plan sponsors in a new survey plan no match changes. A Callan Associates news release about its DC sponsor poll said 1% planned a match decrease while 20% of respondents were unsure what steps they might take by the end of 2009 regarding the match." (PLANSPONSOR.com; free registration required)
Economy Slows Auto Enrollment Trend
Excerpt: "According to a new survey by Hewitt Associates, many companies are looking for ways to lower the costs of their retirement benefits while still encouraging their workers to invest wisely for retirement." (PLANSPONSOR.com; free registration required)
State Street Validated by Company Stock Suit Ruling
Excerpt: "A federal appellate court has cleared State Street Bank & Trust Co. of wrongdoing for selling W.R. Grace Company stock from the company's 401(k) plan. The 1st U.S. Circuit Court of Appeals, upholding a lower court decision, ruled that State Street did not breach its Employee Retirement Income Security Act (ERISA) fiduciary duties when it sold the Grace stock while acting as an independent fiduciary." (planadvisor)
The Disappearing Defined Benefit Pension and Its Potential Impact on the Retirement Incomes of Boomers
Excerpt: "Over the last three decades there has been a steady shift from DB to DC pensions. The Pension Protection Act of 2006 may accelerate this trend. This paper examines the impact of an accelerated freeze on the retirement income of boomers. Simulations suggest that such a scenario would produce more losers than winners and reduce average retirement incomes. Income changes will be substantial among high-income workers, who have the highest DB coverage and pension incomes. Late boomers will experience the largest impacts, as they lose their high DB accrual years and have inadequate time to accumulate DC wealth before retirement." (Urban Institute)
[Opinion]
Recipe for an Emerging Definition of Retirement
Excerpt: "[The Emerging Definitions of Retirement themes were] explored during a panel session of actuaries from around the world at the Society of Actuaries' 2008 Living to 100 Symposium. The panelists, representing a variety of perspectives on retirement . . . . [These] excerpts from the session provide a high-level recap of the lively conversation that ensued among the panelists." (Society of Actuaries)
[Opinion]
ICI Comments on IRS Proposal on Notices of Failure to Defer Distributions
Excerpt: "ICI has commented on a proposed IRS regulation, mandated by the Pension Protection Act of 2006 (PPA), regarding the content of benefit plan distribution notices to participants." (Investment Company Institute)
DATAIR Employee Benefit Systems, Inc. (Sponsor)
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Links to Items on Executive Comp, Benefits in General
[Guidance Overview]
Lilly Ledbetter Fair Pay Act of 2009 Passes: Benefits Impacted
Excerpt: "Scotusblog has a post about the legislation here. Excerpt: The key provision says that 'an unlawful employment practice occurs' not only when a compensation policy or practice is adopted, but also when a worker becomes subject to the policy, or when the policy is applied to any worker 'each time wages, benefits, or other compensation is paid,' resulting from the discriminatory policy. In referring to benefits, as well as wages, the new Act might be interpreted to mean that a workers' entitlement to something other than wages or salary may be covered, so long as it is tied to the discriminatory pay scale. Thus, pension benefits linked to wage or salary levels perhaps also are covered. The bill has a retroactive effective date of May 28, 2007." (Attorney B. Janell Grenier via Benefitsblog.com)
[Guidance Overview]
Jan. 31 Reporting Requirement Deadline Regarding ISOs and ESPPs
Excerpt: "This is a reminder to public and private companies that grant incentive stock options (ISOs) or maintain a tax-advantaged employee stock purchase plan (ESPP). Section 6039 of the Internal Revenue Code of 1986, as amended requires such companies to provide information statements by January 31, 2009 to each employee who during 2008 either (i) received stock upon the exercise of an incentive stock option or (ii) sold or otherwise transferred legal title to stock acquired under an employee stock purchase plan. Treasury regulations specify the information required to be in each information statement." (Briggs and Morgan)
More Companies Cancel or Reduce Employee Awards as Sinking Prices Complicate Share-Based Compensation
Excerpt: "The vicious bear market is presenting many companies with an odd problem: They're running out of shares with which to pay employees. Caraustar Industries Inc., a maker of recycled paperboard, canceled old share awards to top executives so it could distribute shares to lower-ranking managers. Seismic-equipment firm ION Geophysical Corp. refunded some employee stock-purchase payments, because it didn't have enough shares. Electronic-equipment maker Keithley Instruments Inc. trimmed awards to executives and directors to preserve shares." (The Wall Street Journal)
Lowe's: Efficiently and Effectively Communicating the Total Rewards Package
Excerpt: "At home improvement retailer Lowe's, there's a lot more to compensation than base salary. But without clear and consistent communication about total rewards, employees tended not to think much about the value of their 401(k) accounts, vacation days, stock options, or bonuses. To help employees better understand the value of all of their rewards, Lowe's asked Hay Group to help them design paper-based total reward statements. The project was so successful that it was expanded to include Spanish language statements for certain stores, and ultimately to a bilingual online version." (The Hay Group)
Employee Ownership Update for February 2, 2009
NCEO Executive Director Corey Rosen discusses a survey of how ESOP companies are weathering the downturn, Google's generous option exchange program, ESOPs and the coming wave of business sales, and initial results from the NCEO's first ESOP membership survey. (National Center for Employee Ownership)
[Opinion]
Audio: Failing Banks' Executive Pay May Face New Rules
Excerpt: "President Obama may announce new rules this week on executive pay for banks seeking government relief. The president called it 'shameful' that some bank CEOs received large bonuses last year, even as their institutions took billions in taxpayer money to stay afloat. Financial writer Roger Lowenstein tells Linda Wertheimer that overpayment of executives is the 'original sin' that fostered a culture of corporate bubbles." (Morning Edition via National Public Radio)
Newly Posted Events
2009 MidWinter Tour: Advanced IRA
in Louisiana on February 6, 2009
presented by Ascensus
2009 MidWinter Tour: Advanced IRA
in California on February 6, 2009
presented by Ascensus
2009 MidWinter Tour: Advanced IRA
in Tennessee on February 11, 2009
presented by Ascensus
2009 MidWinter Tour: Advanced IRA
in District of Columbia on February 11, 2009
presented by Ascensus
2009 MidWinter Tour: Advanced IRA
in Kansas on February 11, 2009
presented by Ascensus
2009 MidWinter Tour: Advanced IRA
in Maryland on February 13, 2009
presented by Ascensus
2009 MidWinter Tour: Advanced IRA
in Pennsylvania on February 25, 2009
presented by Ascensus
2009 MidWinter Tour: Advanced IRA
in Wisconsin on February 25, 2009
presented by Ascensus
2009 MidWinter Tour: Advanced IRA
in Wisconsin on February 27, 2009
presented by Ascensus
2009 MidWinter Tour: Advanced IRA
in Pennsylvania on February 27, 2009
presented by Ascensus
2009 MidWinter Tour: Advanced IRA
in California on March 4, 2009
presented by Ascensus
2009 MidWinter Tour: Advanced IRA
in California on March 6, 2009
presented by Ascensus
2009 MidWinter Tour: IRA Essentials
in Louisiana on February 5, 2009
presented by Ascensus
2009 MidWinter Tour: IRA Essentials
in California on February 5, 2009
presented by Ascensus
2009 MidWinter Tour: IRA Essentials
in Tennessee on February 10, 2009
presented by Ascensus
2009 MidWinter Tour: IRA Essentials
in District of Columbia on February 10, 2009
presented by Ascensus
2009 MidWinter Tour: IRA Essentials
in Kansas on February 10, 2009
presented by Ascensus
2009 MidWinter Tour: IRA Essentials
in Maryland on February 12, 2009
presented by Ascensus
2009 MidWinter Tour: IRA Essentials
in Wisconsin on February 24, 2009
presented by Ascensus
2009 MidWinter Tour: IRA Essentials
in Pennsylvania on February 24, 2009
presented by Ascensus
2009 MidWinter Tour: IRA Essentials
in Wisconsin on February 26, 2009
presented by Ascensus
2009 MidWinter Tour: IRA Essentials
in Pennsylvania on February 26, 2009
presented by Ascensus
2009 MidWinter Tour: IRA Essentials
in California on March 3, 2009
presented by Ascensus
2009 MidWinter Tour: IRA Essentials
in California on March 5, 2009
presented by Ascensus
2009 Web/Telephone Seminar: 403(b)Plans
Nationwide on March 19, 2009
presented by Ascensus
2009 Web/Telephone Seminar: Amending & Restating QPs for EGTRRA
Nationwide on February 24, 2009
presented by Ascensus
2009 Web/Telephone Seminar: Comparing Roth & Traditional IRAs
Nationwide on March 24, 2009
presented by Ascensus
2009 Web/Telephone Seminar: Conducting Your Own Compliance Audit
Nationwide on February 19, 2009
presented by Ascensus
2009 Web/Telephone Seminar: Conversions & Recharacterizations
Nationwide on March 12, 2009
presented by Ascensus
2009 Web/Telephone Seminar: Individual(k) Plans
Nationwide on February 24, 2009
presented by Ascensus
2009 Web/Telephone Seminar: IRA Contributions
Nationwide on March 5, 2009
presented by Ascensus
2009 Web/Telephone Seminar: IRA Frontline Fundamentals - Part 1
Nationwide on February 10, 2009
presented by Ascensus
2009 Web/Telephone Seminar: IRA Frontline Fundamentals - Part 2
Nationwide on February 12, 2009
presented by Ascensus
2009 Web/Telephone Seminar: IRA Required Minimum Distributions
Nationwide on March 10, 2009
presented by Ascensus
2009 Web/Telephone Seminar: QRP Beneficiary Rollovers to Inherited IRAs
Nationwide on March 3, 2009
presented by Ascensus
2009 Web/Telephone Seminar: Retirement Distribution and Income Planning
Nationwide on February 26, 2009
presented by Ascensus
2009 Web/Telephone Seminar: SEP Plans
Nationwide on February 26, 2009
presented by Ascensus
2009 Web/Telephone Seminar: SIMPLE Plans
Nationwide on March 17, 2009
presented by Ascensus
2009 Web/Telephone Seminar: Understanding & Processing Transfers & Rollovers
Nationwide on March 26, 2009
presented by Ascensus
2009 Web/Telephone Seminar: Withholding
Nationwide on February 5, 2009
presented by Ascensus
2009 Web/Telephone Seminars: Establishing and Amending IRAs
Nationwide on March 31, 2009
presented by Ascensus
Consumer Driven Health Plans: Empowering Employees to Take Control of Their Health
in Georgia on February 19, 2009
presented by WEB (Worldwide Employee Benefit Network) Atlanta Chapter
Retirement Plans in a Troubled Economy Seminar - NEW in March 2009
Nationwide on March 19, 2009
presented by SunGard Relius
SPARK Accredited Retirement Plan Consultant (ARC) Classroom Session
in New York on March 4, 2009
presented by SPARK -- Society of Professional Asset-Managers and Record Keepers
Newly Posted Press Releases
Liability-Driven Investing Served Pension Funds Better Than Traditional Allocations in 2008
Watson Wyatt
U.S. Labor Department Obtains Nearly $115,000 From Bankrupt Merrimac, Mass., Company To Pay Employee Health Claims
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
HR XCEL and Employee Benefits Communications Team Up to Help Employers Drive Employee Engagement
HR XCEL, Inc.
Newly Posted or Renewed Job Openings
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Account Manager (TPA/Insurance)
for Zenith Administrators
in NV
Retirement Sales/Marketing
for Non-producing TPA
in NC, SC
Project Manager
for ftwilliam.com
in WI
Internal Sales Executive
for Dedicated Defined Benefit Services
in CA
Qualified Defined Contribution Plan Administrator
for Nationwide Financial
in OH
Handy Links:
- View Today's Active Message Threads
- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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